Articles

Employment Law Strategist
February 2016

A handbook that was once the foundation of good employment practices may now violate federal law and nothing has changed except how the General Counsel for the National Labor Relations Board (the “GC”) interprets the National Labor Relations Act (“NLRA”).  While many of us think of the NLRA as the federal law that governs union related activities, it actually does much more; it protects the rights of all employees to act together regarding their wages, hours, and other working conditions (these are known as “Section 7 rights”).   Over the last few years, this has come to mean this law protects employees’ right to work together on almost any issue that involves their workplace.  Such diverse issues as unionizing, wages, openly criticizing management, working on safety issues, and much more are all examples of conduct the NLRA now protects. Given all these new rights your employees have, your Handbook may now be a minefield of NLRA violations.  Below are some of the major examples of dangers that may be hidden in your employee handbook.  All of these examples are discussed in a Memorandum issued by the GC (the “Memo”).  With the arrival of the New Year, there is no time like the present to confirm your company handbook is complaint with the NLRA.

The basic concept behind compliance with the NLRA is to make sure no work place rule has a chilling effect on an employee’s right to unionize or otherwise work together with other employees to address workplace issues.  This can occur by either explicit restriction of those rights or by a rule’s inappropriate (but possibly indirect or even unintended) impact on those employee’s rights.  Specifically, the Memo states: “even if a rules does not explicitly prohibit Section 7 activity, however, it would still be found unlawful if 1) employees would reasonably construe the rule’s language to prohibit Section 7 activity; 2) the rule was promulgated in response to union or other Section 7 activity; or 3) the rule was actually applied to restrict the exercise of Section 7 rights.” Since most workplace violations of the NLRA occur under the first prong, the Memo shed light on the most common violations under it:  confidentiality provisions; restrictions on employee conduct towards the company and supervisors; limitations on conduct towards fellow employees; restraints on communications with third parties; limits on the use of company logos, copyrights or trademarks;  controls on the use of photography and recording;  restrictions on leaving work; and conflict of interest rules. The Memo also provided guidance on how to make these rules lawful.  This article will only focus on confidentiality provisions, respect in the work place, and employee conduct, although an employer should familiarize itself with all areas noted by the CG.

Many companies wish to safe guard their privacy.  It’s instinctual. In order to do so, most companies have handbooks or other policies which contain broad confidentiality obligations. While companies have the right to safeguard their privacy, the GC has made clear that such protections cannot infringe on an employee’s Section 7 rights. When confidentiality rules restrict the voluntary exchange of employee information (wages, terms of employment, etc.), the GC has clarified that they can become unlawful.  For example, rules prohibiting the collection of co-workers’ telephone numbers and addresses – without clarifying that such conduct is allowed if the information was obtained voluntarily, is unlawful.  Other rules which specifically ban publishing private conversations of “others”, “’disclosing …. details about the employer,’” sharing information that is not public, and using information which could adversely impact the company’s interest, image, or reputation, were also deemed unlawful by the GC.  The bottom line is that these rules, in isolation, appear to restrict an employee’s right to talk with one another and/or discuss issues regarding the terms and conditions of his employment.

However, when a rule is narrowly tailored to clarify these issues, it can be lawful.  Specifically, the Memo clarifies that confidentiality rules can be lawful when: “1) they do not reference information regarding employees or employee terms and conditions of employment, 2) although they use the general term ‘confidential’ they do not define it in an overbroad manner, and 3) they do not otherwise contain language that would reasonably be construed to prohibit Section 7 communications.”   Lawful examples in the Memo include rules which prohibit disclosing unauthorized business secrets, sharing non-public proprietary company information, or divulging confidential information about “’business partners, vendors or customers.’” Even a broader prohibition may be proper if the context within which it is placed (i.e. other S.E.C. laws that would be violated by disclosure) makes clear that it is not impacting employees Section 7 rights.

Perhaps one of the most fascinating areas regarding violations is when an employer tries to regulate conduct in the workplace.  Obviously, an employer wants a pleasant working environment without insubordination.  However, even in an era when respect in the work place is emphasized and in some cases mandated, employers need to be careful.  Exact phraseology is the key.  The basic principle is that an employee is welcome to criticize how an employer treats its employees or an employer’s employment policies.  Therefore, generic and broad phrases regarding respect for the company in the workplace will frequently violate an employee’s Section 7 rights when it pertains to critiquing the employer. When the rule is targeted at co-workers, customers, or third parties, however, the GC will probably deem it lawful.

Some examples of policy violations that pertain to employees’ conduct towards employers which were based on a rule being present without sufficient context, include mandating respect towards the employer (along with others), not denigrating or making fun of the company, refraining from harming an employer’s business or reputation, curtailing posts on social media if they affect the business operation or reputation of the employer, and undermining or defaming the company.  These unlawful prohibitions focus on the employees’ Section 7 rights, not the product the employer is making. Two points of interest arise here.  First, even if a statement made by an employee is found to be false or defamatory, it is not permitted to be banned by a work place policy.  But second, prohibiting “maliciously” (intentionally) false statements is lawful.

Examples of lawful rules in this area include not permitting rudeness toward a costumer or disrespecting the public or a customer (because they do not include the company).  Additionally, rules which relate to people being required to cooperate at work in the carrying out of their required duties may also be lawful. Given the importance of this concept for a successful business, the GC has made clear that these types of rules, depending on their context, generally do not violate the NLRA. Some examples in the Memo include the expectation that employees work in a “.. ‘cooperative manner with management/supervision, coworkers, customers and vendors,’” requiring employees to “’abide by Company’s policies and to cooperate fully in any investigation that the Company may take,’” and that employees not be “’insubordinate, threatening, intimidating, disrespectful, or assaulting to a manager/supervisor, coworker, customer or vendor….’”

Another area of restrictions that relates in part to respect in the work place is how employees treat each other.  This topic has many potential pitfalls for employers.  While an employer may strive to create an environment that is welcoming and calm, permitting employees to argue and debate about Section 7 subjects and rights is mandatory.  The conflict between these issues and the desire to control the work environment is what makes handbook rules in this area challenging.

The Memo sheds light on controlling how employees’ treat others with their rights under the NLRA. On the unlawful side, the Memo identified broad clauses that included: “’don’t pick fights’ online;” “’avoid the use of offensive, derogatory, or prejudicial comments;’” “do not send ‘unwanted, offensive, or inappropriate’ e-mails;” and refrain from using “’insulting, embarrassing, hurtful or abusive comments about other company employees on line.’”  The rationale is simply that discussions about unions, labor policies, or how an employer treats its employees can get intense/heated and to curtail such conversations limits protected rights.

On the other hand, lawful examples in the Memo include those where the context of the restriction is clear and where the employer or its managers are not mentioned. Specifically, the GC found lawful the following rules which prohibited: “’threatening, intimidating, coercing, or otherwise interfering with the job performance of fellow employees or visitors;’” “’[m]aking inappropriate gestures, including visual staring;’” and “no ‘use of racial slurs, derogatory comments or insults.’”

The interplay between handbooks and Section 7 rights can seem overwhelming but this has become the new normal in this area.  The nuances between what is lawful and what is a Section 7 violation can be difficult to separate. In drafting handbooks and policies, context of the prohibition and who it impacts is pivotal.  A broader restriction contained in a specific area of a handbook where it is clear it is meant to curtail improper activity may be lawful. However, a narrow restriction without context may be unlawful.  To maintain a proper handbook, employers must familiarize themselves with all of the GC’s rules.  Policies which curtail the rights of employees to criticize or discuss unions, hours, wages, and other terms or conditions of employment are now all unlawful.  Employers should regularly consult with counsel to ensure their handbooks are in compliance with existing laws and stay abreast of the changes as they are coming fast and furious.

Robert G. Brody is the founder of Brody and Associates, LLC.  Susan M. Westphal is an attorney at the Firm.  Brody and Associates represents management in employment and labor law matters and has offices in Westport and New York City.